Evercore ISI has upgraded Procter & Gamble to outperform from in line, according to reports from CNBC TV18. The investment firm has now raised its price target to $166.00, representing a 14% premium to the stock's closing price on the day prior to the upgrade. The upgrade marks Evercore ISI's first top-line upside call on the company in two years, as reported by Investing.com. The firm's first-quarter earnings per share estimate now stands $0.02 above consensus, with the new target aligning closely with the stock's 52-week high of $167.25. As per Evercore ISI analyst Robert Ottenstein, "All interventions correcting gaps in Procter's value equations are layered and working, with top-line and U.S. share lifts mechanically extending into [the fourth quarter of fiscal year 2027]."
Evercore ISI has raised its first-quarter fiscal 2027 organic sales growth estimate to approximately 3% from a previous forecast, compared with consensus expectations of 2%, as reported by Investing.com. The firm expects Procter & Gamble to exit fiscal 2027 with growth of around 4%, a rate the firm said delivers operating leverage. According to InvestingPro analysis, P&G appears undervalued at current levels, with a Fair Value of $158, suggesting additional upside potential beyond Evercore's target. The stock currently trades at a P/E ratio of 22 with a market capitalization of $339 billion. As per Evercore ISI, "Improvement beyond the interventions— high-margin Olay, Downy, Native, Dawn and Pantene now contribute more to growth than Pampers, where the Costco reentry and the upgraded mid-tier diaper face abating headwinds from Chinese diapers."
Evercore ISI's upgrade reflects improving U.S. execution, stabilizing category volumes, and signs that the company's new organization is beginning to deliver, as reported by SA News Editor. The firm noted that Procter's U.S. category volumes are stabilizing, gaining 40 basis points sequentially versus the June quarter, highlighting the company's operational improvements. Evercore ISI emphasized that Procter continues to lead price-mix, and the acceleration to 4.8% growth in September suggests that innovation, pricing and marketing are resonating. The investment firm's confidence stems from the company's new organization structure beginning to show tangible results, marking a significant shift from previous performance challenges.
Shares of Procter & Gamble have ticked up about 2% year to date, while the S&P 500 is up 14%, highlighting the stock's underperformance relative to the broader market. The company has faced pressure from higher tariffs and other costs that have pressured its margins, along with sluggish sales due to softer consumer demand and mounting competition. However, Evercore ISI reports that Procter's U.S. category volumes are stabilizing, gaining 40 basis points sequentially versus the June quarter. Following the rating change, shares rose more than 1%, reflecting positive market response to the upgrade. The company has also contended with elevated but targeted promotions, which analysts believe should protect pricing and ultimately help boost the stock's performance.
